Nomad Foods will fund the transaction through cash and debt

Nomad Foods will fund the transaction through cash and debt

Nomad Foods is paying EUR240m (US$281.6m) for fellow frozen food manufacturer Aunt Bessie's as the UK firm's acquisition trail continues.

The Birds Eye and Findus owner is expanding its range into frozen potatoes and Yorkshire puddings with the purchase of the Aunt Bessie's brand from William Jackson Food Group, complete with a production facility in the city of Hull in northern England.

Nomad said in a statement announcing the deal today (6 June) Aunt Bessie's holds the number one and number two UK market positions in Yorkshire puddings and frozen potatoes, respectively.

Back in March, chief executive Stefan Descheemaeker had flagged the company may be interested in making more acquisitions after purchasing the Goodfella's and San Marco frozen pizza assets from the UK's Boparan Holdings, which owns chicken processor 2 Sisters Food Group.

The company said today the combination of Aunt Bessie's, Birds Eye and Goodfella's is expected to result in a "highly complementary portfolio with significantly enhanced scale, greater diversification and more resources to accelerate category growth". 

Descheemaeker said: "Aunt Bessie's iconic brand, positive values and strong product credentials align well with our existing portfolio. As our second accretive acquisition in 2018, Aunt Bessie's represents another step toward our goal of transforming the frozen food category and building a portfolio of best-in-class food brands. 

"Aunt Bessie's significantly expands our presence within potatoes, one of the largest categories in frozen food, while adding another dimension to our growing portfolio in the UK."

Nomad Foods' joint chairman and founder Noam Gottesman said the acquisition, which should be completed during the third quarter, subject to regulatory approvals, is expected to be immediately accretive to its earnings. The purchase will be funded through cash on hand and debt.  

For its fiscal year ended in April, Aunt Bessie's generated EUR123m in revenues and adjusted EBITDA of EUR23m.

Meanwhile, Nomad booked revenues of EUR1.9bn in the financial year ended December and adjusted EBITDA of EUR328m. Net income rose more than three-fold to EUR137m.